The Ever-Evolving Roles and Marketing and Revenue Management
Rapidly advancing technology and ever evolving guest expectations have given rise to the opportunity for substantial transformation in roles traditionally siloed into the areas of marketing and revenue management. In a time where technology allows marketers to be nimbler and tactics to be more targeted than ever, an integrated effort where marketing strategies are informed by revenue management insights and revenue management strategies are informed by marketing data is crucial for stand-out results in the hyper competitive hospitality space.
Very early in my career, I made the move from operations to revenue management. It was the very yearly days where revenue managers were very much viewed as executive reservation managers and expected to perform reservation manager duties. But, as technology advanced and interfaces evolved, so did revenue management. Revenue managers were finally able to develop a strategy based on past performance and deploy it across the channels that existed at that time, enabling all bookers to experience the same strategy for the same request, regardless of the reservation method. At the time, this was groundbreaking, but we were still very much in the background; I can recall describing my job to people as being the person who made sure the hotel was selling the right rate to the right person at the right time. Not completely accurate at the time, but it did help people understand that I didn't work in accounting, and it certainly is a more accurate statement today.
At the same time, marketing existed at the brand level and largely in the form of printed ads, collateral, and consortiums. In my view, marketing at the hotel was largely table tents, handouts at reception and elevator posters. Marketing, as a discipline, was not in my frame of consciousness and certainly not something for which I was permitted or expected to inform, strategize, or collaborate on. It was more like something that was being done to me than with me (or for me).
Since then, revenue management has taken its rightful place at the table but is still sometimes viewed simply as pricing strategies and inventory control. With the advancements in revenue management technology, we are seeing more and more sharing and podding leaving revenue managers little time to embrace and harness the power of the newly evolved technology and the data it provides. While marketing channels, tools and technology have advanced dramatically since that time as well, hospitality marketing is still often viewed as somewhat basic and confined to broad paid media efforts, simple social media posting and e-blasts.
Like revenue management, though there are many more tools and a great deal more data, there is a push for sharing and not enough funding for quality marketers. As channels for consuming information have become vaster and more complex, so have the tools and roles of marketers and revenue managers and, more importantly, the need for the two to work harmoniously toward a common goal.
With abundant competition and limited marketing budgets, spending resources where they'll do the most good and merchandising results are critical. Working together to understand where gaps in the business exist, whether they are natural soft spots in demand or deficits created by unexpected circumstances such as a group drop or weather event, is an important part of creating a revenue driven marketing strategy.
In addition to revenue management tools like IDeaS, Revinate and OTA Insight, Davidson uses the likes of Google Analytics and Buxton Analytics to understand probabilities, buying behaviors and demographics to help revenue managers and marketers work together to develop and deliver offerings that appeal to the consumers that the hotel wants and needs most. Further, these kinds of tools help marketers inform everything from timing and placement of paid media investments to the type of creative used and the channels on which it's distributed.
Working as a cross-functional team and adopting a data-informed decision strategy in both areas leads to more predictable outcomes in both topline results and guest satisfaction. A holistic view of the guest enables the team to create custom pricing strategies as well as tailored services and experiences. Together, reaching beyond guest acquisition, revenue managers and marketers who work together throughout the guest journey may experience increased success in keeping guests on the hotel footprint to dine and purchase services and in fortifying long-term loyalty.
Though the benefits of integrating revenue management and marketing clearly exist, doing so requires a cultural shift and investments in professional human capital and technology. We can no longer rely on unskilled marketers and podded revenue managers to produce market-topping results just as we can no longer rely on basic rate strategies and a print brochure to capture the interest of our intended guest.
Catalyzing the shift from siloed commercial efforts to an integrated, cross-functional team effort involves enhancing skill sets and merchandising efforts and successes better and differently.
Enhancing skills will mean asking revenue managers and marketers to develop skills that have been historically native to each other's disciplines. For example, hospitality marketers need to get much more involved in analyzing and synthesizing data beyond the metrics they are used to working with. Instead of measuring general success in the form of ROAS, they will need to apply more logic to existing metrics to extrapolate insights and estimate the value of tactics. Revenue managers will need to embrace KPIs that are not rooted in a set dollar or cover number. They will need to accept that a spike in visits to the site on the same day a feature-length story was published in a KPI media outlet is a success even if it doesn't result in an immediate booking.
Developing a regular cadence for communicating planned deployments as well as ongoing and final results is imperative in creating buy-in for those responsible for allocating budget to marketing and revenue management human resources, technology, and media budgets. Developing tangible KPIs, even if not tied to a final booking, and communicating them will help create the connective tissue between cause and effect for stakeholders. A good place for these conversations to take place is in the existing revmax, sales strategy, revenue generation or whatever-you-call-it meeting. Marketing efforts and their results should be discussed at the same time that forecast, pricing and control discussions are taking place, as one enhances and supports the other. There is definitely a time for report-outs, but talking about a set of dates holistically in this way helps to set the tone for how we should be thinking about strategy going forward.
In addition to serving as an excellent method for contextualizing results and uniting all efforts behind a single goal, talking about tactics and results in this way also creates a much more agile platform for analyzing strategies. It will force the team to examine how the individual tactics are working and provide a space to discuss recalibration or to restate expected outcomes.
The way that end results are discussed and presented must also evolve. The customer journey is more complex than ever, so creating context for your results could mean the difference between a campaign being viewed as a success or a failure. As previously discussed, relying on ROAS, social media engagement or bookings no longer tells the whole story and if the person holding the purse-strings cannot see the relationship between the KPI and a dollar, you need to draw the line between the two for them.
Merchandising success should be an integrated effort and not siloed by tactic or department. Many times, we see teams present month end results to their stakeholders and we see a page for social media, a page for paid media, a page for revenue management and so on. While they tell individual stories, they almost never serve the greater story. Simply showing social media results for the month doesn't tell someone whether the overarching marketing effort is healthy or not without the context of how those social media results tie into the overall plan and how they influenced, or will influence, the topline results of the hotel.
To create the connective tissue needed to foster buy-in, the team will sometimes need to synthesize data produced to show topline gains related to the effort. This may mean drawing conclusions based on various datapoints. Over time, the models created to assess success for tactics and channels that are more difficult to articulate in a traditional way will become accepted and can be used to estimate topline results. Proactivity, consistency, and transparency are all important in creating the framework for this kind of collaboration.
If the team works together to tell a good and complete story, stakeholders will connect the dots and give credit where credit is due. Over time, people will be encouraging the team to find the highest quality candidates in marketing and revenue management and will be offering dollars to support ongoing and key campaign efforts.
As predictive analytics, machine learning and AI continue to evolve and dominate, hotels that focus on deepening the integration of revenue management and marketing will rise to the top as capabilities for creating more sophisticated pricing and marketing experiences increase. Taking an integrated, data-informed approach to revenue management and marketing will absolutely lead to exceptional topline results and guest experience.
Reprinted from the Hotel Business Review with permission from http://www.hotelexecutive.com/.
